While the market rally on Thursday was a relief to beleaguered investors, the fact is that 7.7% year-over-year inflation is still way above the 2% Federal Reserve target. While the 75-basis-point increases in the federal funds rate are likely over, the increases are probably not.
Cryptocurrency has been eviscerated, big tech has been destroyed and is laying off tens of thousands of employees (Amazon lost $1 trillion in market cap), and even “safe” stocks like Disney have imploded. So what will work in 2023?
One good bet for next year is the continued strength in commodities, which come in many forms, from metals and mining to oil and gas to grains and more. We decided to screen the Goldman Sachs commodity research database looking for stock ideas for next year that are Buy rated and come with very dependable dividends. The following five stocks came up. While all are favorites at Goldman Sachs and across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Bunge
This top mid-cap stock has rallied nicely off the July lows but still offers investors an outstanding entry point. Bunge Ltd. (NYSE: BG) operates as an agribusiness and food company worldwide. It operates in the following segments.
The Agribusiness segment purchases, stores, transports, processes and sells agricultural commodities and commodity products, including oilseeds (primarily soybeans, rapeseed, canola and sunflower seeds) and grains (primarily wheat and corn) and vegetable oils and protein meals. It provides its products for animal feed manufacturers, livestock producers, wheat and corn millers and other oilseed processors, as well as third-party edible oil processing companies, as well as for industrial and biodiesel production.
The Edible Oil Products segment provides packaged and bulk oils and fats, including cooking oils, shortenings, margarines, mayonnaise and others for baked goods companies, snack food producers, confectioners, restaurant chains, foodservice operators, infant nutrition companies and other food manufacturers, as well as grocery chains, wholesalers, distributors and other retailers.
The Milling Products segment offers wheat flours and bakery mixes, corn milling products (including dry-milled cornmeals and flours, wet-milled masa and flours, and flaking and brewer’s grits, as well as soy-fortified cornmeal, corn-soy blends, and other products), whole grain and fiber ingredients and milled rice products.
The Sugar and Bioenergy segment produces sugar and ethanol, and it generates electricity from burning sugarcane bagasse. The Fertilizer segment offers nitrogen, phosphate and potassium fertilizers, as well as single super phosphate, ammonia, ammonium thiosulfate, monoammonium phosphate, diammonium phosphate, triple superphosphate, urea, urea-ammonium nitrate, ammonium sulfate and potassium chloride.
Bunge stock comes with a 2.40% dividend and is on the Goldman Sachs Conviction List of top stock ideas. The firm’s $165 price target would be a new all-time high. The shares closed on Thursday at $102.19.
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